The First Amendment — Use It or Lose It!

Why Capitalism Is Evil

I was surprised by people’s reaction to the conclusion Michael Moore drew in, Capitalism: A Love Story, that Capitalism Is Evil. I thought people mostly knew that, or at least strongly suspected it, so the idea wouldn’t be startling.

Of course capitalists don’t think Capitalism is evil. But many progressives, too, were taken aback by Moore’s blunt conclusion — either disturbed by the potential implications, or, more often, apparently not having thought about it deeply enough to have a clear opinion.

But many more people than just Michael Moore have thought deeply about whether Capitalism is Evil, and the arguments and evidence, when laid out (as I will shortly do), demonstrate that Capitalism is indeed evil, by any reasonable definition “evil.” In other words, Capitalism is not just evil, it is VERY evil — or, we might say, Capitalism can be proved Evil beyond a reasonable doubt.

But breaking down the layers of capitalist-apologist propaganda that have accumulated in our brains, and challenging our preconceptions about Capitalism, is no small job. People’s reactions to the movie revealed many of the false meme’s lurking in our subconscious, like, “Capitalism may be bad, but the alternatives are worse,” and “Capitalism has some negative effects, but the overall benefits of Capitalism would be positive if we protected against its harsher aspects,” and “Replacing Capitalism would surely eliminate freedoms, so we might not be better off, and we could be much worse off.”

I will confront these memes not with my own arguments, but instead with the much deeper thinking of several subject matter experts: Michael Albert, Joel Kovel, Samuel Bowles and Herbert Gintis, and Michael Moore.

Michael Albert’s book, Parecon; Joel Kovel’s book, The Enemy of Nature, Samuel Bowles and Herbert Gintis’ book, Capitalism and Democracy, as well as Moore’s documentary, Capitalism: A Love Story, thoroughly consider the question of whether Capitalism is Evil, and their combined arguments carry more force than any one argument alone.

Albert approaches Capitalism from the standpoint of economic justice, and argues forcefully that Capitalism’s methods and outcomes are intrinsically destructive of people and institutions. Kovel presses an environmental critique, showing that regardless of the negative social implications (which he nonetheless details impressively), Capitalism necessarily will result in the destruction of our environment, nature generally, and eventually the planet — so Capitalism is inexorably opposed to humanity, and indeed all life. Bowles and Gintis consider the conditions necessary for Democracy, and the extent to which Capitalism not only undermines the institutions of Democracy, but also makes people less capable of governing themselves. Finally, Moore approaches the question from an ethic of caring, attempting to illustrate that Capitalism exacts an intolerable and unnecessary toll on people’s lives, and is inconsistent with our most basic values.

I will first lay out the four arguments in greater depth, and then consider whether the most popular defenses of Capitalism can survive the heat of these critiques. We will see that they do not, which in turn begs the question of possible alternatives to Capitalism that might create for us a better world, or at least a sustainable and less-bad world. That question I will answer, too, but separately, as part of my Economic Power series.

Michael AlbertParecon: Life After Capitalism
Michael Albert sums it up like this:

Capitalist globalization produces poverty, ill-health, shortened life-spans, reduced quality of life, and ecological collapse…Humanity’s well-being does not guide the process, but is instead sacrificed on behalf of private profit.

That’s why it’s bad. The cause of this badness, according to Albert, is that:

“Capitalism revolves around private ownership of the means of production, market allocation, and corporate divisions of labor. It remunerates property, power, and to a limited extent contribution to output. Class divisions arise from differences in property ownership, and differential access to empowered work versus subservient work. Class divisions induce huge differences in decision-making influence and quality of life.”

Albert argues for an alternate vision, which he calls Participatory Economics (or Parecon“), that reverses each of these paradigms. So, for example, instead of private ownership of the means of production, each workplace would be owned in equal part by all citizens. Top-down hierarchical decision-making structures would be replaced with bottom-up democratic institutions. Instead of remunerating property, power, and output, Parecon would reward effort and sacrifice. Instead of creating differential access to empowered work and decision-making influence, people would have balanced job-complexes that allow everyone to engage in some empowering work, and require everyone to engage in some grunt work.

Albert’s enterprise is primarily to show why these alternative arrangements are in fact feasible, and could be administered fairly, without making us crazy, and without the frustrating or inefficient bureaucracy that people worry would engulf us if we ever attempted to replace our Dilbert-esque workplaces with something better.

But for the purposes of this essay, we do not need to establish that Albert has a better idea. Only that Capitalism does in fact necessarily “sacrifice humanity’s well-being on behalf of private profit.” Albert’s arguments toward this conclusion are strong.

Capitalism DOES reliably remunerate property, as any trust-funder knows, but not necessarily hard work, as any good janitor, day laborer knows, or even some school teachers, bus drivers, and airline pilots.

The class awareness around accumulated property is deeply engrained in our consciousness — children’s stories frequently revolve around the contrasting fates of peasants and kings, princes and paupers. By adulthood, we are accustomed to separate-but-equal accommodations for the wealthy in nearly all public places — airplanes, sports stadiums, freeways, and airport waiting lounges. Nearly everywhere in modern society, the wealthy have created for themselves a separate shadow world of superior facilities in education, training, transportation, entertainment, athletics, information, and shopping. We are even seeing fast-tracks for the wealthy in hospitals and airport security lines.

The end result of these superior accommodations is a self-perpetuating cycle that better prepares the wealthy and their progeny to successfully assume positions of influence and leadership, and thus further expand their wealth. This cycle, of course, fatally undermines the alleged justification for the wealth disparities in the first place — that they were somehow “earned” or “deserved,” rather than received by inheritance, marriage, or appointment.

But Albert goes further, pointing out that “each of these modes of connecting actors imposes on the economy pressures that subvert solidarity, equity, diversity, and self-management.” In other words, the foundation of a just society is a culture of shared understanding that we are all in this together, that we have to depend on each other, that we have to help each other, and that we have to do these things while respecting our differences and granting each other the right to uniqueness and self-actualization, so that we can truly know freedom.

It’s no small task to credibly define such institutions, although Albert may in fact have done it; give him a read.

But it is not hard to see that Capitalism institutionally ensures outcomes that are approximately as devastating as Albert describes, and approximately as devastating as we see in the real world after a few centuries’ experiment with Capitalism. Further, the precise features that define Capitalism — private ownership of the means of production, hierarchical control of the workplace, remuneration of property and power — can be pretty clearly shown to lead to class divisions, unequal opportunity, and huge discrepancies in decision-making opportunity and quality of life.

When the benefits of the system are concentrated in a very few, and most people are left dramatically worse off, it is indeed fair to say that humanity’s well-being has been sacrificed on behalf of private profit. And the system that causes it may be called by its true name, “Evil.”

But if structural sociological analysis is not your thing, Joel Kovel takes a very different approach.

Joel KovelThe Enemy of Nature: The End of Capitalism or the End of the World?
Kovel intends quite literally the harsh dilemma posed by his book’s subtitle. He spends considerable effort showing that our society will either end Capitalism or it will end us — at least most of us, and life as we know it.

One of Kovel’s more intriguing suggestions is that the western environmental movement is misguidedly attempting to reconcile Capitalism and Environmentalism (e.g., Clean Water Act, Emissions Cap-and-Trade) is misguided and cannot succeed. Some of his best analysis focuses on the way Capitalism tends to shape the behavior of people and institutions, so that disasters like the explosion at Union Carbide’s Bhopal chemical plant, which killed 16,000 and injured perhaps 500,000 more, should be understood as inevitable, rather than aberrational. I recommend the entire book.

But I am going to extract just a piece of Kovel’s argument, which directly considers the structural elements of capitalism that (in Kovels’s view) ensure that capitalism will destroy the world, and why incremental reforms cannot adequately mitigate this dire outcome. Obviously if this argument is true, then Michael Albert’s notions of social justice hardly need be considered: we either jettison Capitalism, or we die — or at least most of us and our descendants die.

Kovel focuses on three essential elements of Capitalism:

1. Capitalism tends to degrade the conditions of its own production.2. Capitalism must expand without end in order to exist3. Capital leads to a chaotic world-system, increasingly polarized between rich and poor, which cannot adequately address the ecological crisis.The combination makes an ever-growing ecological crisis an iron necessity so long as capital rules, no matter what measures are taken to tidy up one corner or another.

Kovel’s first point, that Capitalism tends to degrade the conditions of its own production, is intended to apply broadly to the intrinsic destructiveness of Capitalism. Capitalism cannot function without profit, and so the capitalist firm is pressured to maximize the gap between cost and price.

Because competitive pressures tend to limit price, cost-cutting becomes a paramount concern of capitalists. In theory, the cost-cutting is focused on efficient production of commodity inputs. But in practice, the cost-pressure is extended to three non-commodity inputs: public infrastructure, people’s labor, and nature itself.

Kovel argues that the pressure to squeeze as much as possible out of people, public infrastructure, and nature, while paying as little as possible, fouls the world by breaking people, disrupting ecosystems, and filling our society with externalized costs, such as pollution.

This degradation may be localized, such as in the Bhopal explosion that resulted from a blizzard of risky cost-cutting measures, or may be generalized, such as the overall global crisis resulting from global warming. However, Kovel insists, neither scenario should be characterized as industrial accidents because they are inevitable outcomes of a system that generates profit by intentionally imposing hardships and creating risk.

The standard business school rejoinder is that all would be well were capitalist institutions merely required to internalize their costs, and so these tragedies reflect only market distortions, not systemic flaws. And this brings us to Kovel’s second principle: Capitalism Must Expand In Order to Exist.

Any firm that ceases to grow becomes a relatively less attractive investment, and capital is withdrawn and moved to faster growing (i.e., higher returning) firms. CEOs who cannot increase the rate of profit are removed. Any firm that fails to grow will simply disappear, its assets purchased by another. No matter how large Microsoft or Wal-Mart become, their urge to grow further is unabated.

As a result, efforts to internalize costs are consistently defeated by firms clever enough to find a previously unnoticed opportunity to create an externality. Or if protective regulations have closed one loophole, the unquenchable thirst for profits will result in political action to open a new loophole.

The pressure to do so is extraordinary, because for capital, it is literally a matter of life or death, and that is a defining element of Capitalism. Although a natural person or a non-profit organization of any size can cover its costs and continue in business indefinitely, the objective of a capitalist organization is not the underlying work, but the extracted profit, so if the profit ceases to grow, capital is moved elsewhere, and the business begins to implode. To resist this result, capitalist firms will seek to squeeze additional profits, even if it ends up crushing the life out of what otherwise was a well-functioning business. It happens over and over.

Kovel is particularly critical of proposed capitalist-oriented solutions to the inevitable economic crisis posed by the quest for endless growth. For example, Kovel argues against the Kyoto carbon-trading scheme:

“Kyoto proceeds on a two-tiered front: to create new markets for trading credits to pollute among the industrial powers, and to create…’Clean Development Mechanisms’…in the South that would offset carbon emissions by building projects, like tree farms, whose goal is the sequestration of carbon. This immense superstructure…rests on two guiding assumptions: Give the corporate sector and the capitalist state the leading role in containing global warming; and do so by making the control of atmospheric carbon the site of new markets and new nodes of accumulation…

The defects of this mammoth blunder are myriad. The scheme is inherently incoherent, for it entails innumerable points that simply cannot be measured or compared. This is essentially because it tries to evade the point of a rational policy, which would be to leave the carbon in the ground in the first place — in other words, one that would put limits on capital. In doing so, Kyoto offers opportunities for swindling of all kinds.

Finally, and most revealing, the scheme will fail precisely insofar as it succeeds — for the money that is to be made as a bribe to get corporate cooperation will of course not be placed in anybody’s mattress. It will enter the great circuits of capital

where it will be used to make more money — perhaps by building golf courses, or expanding air travel, or going wherever the never-ending and cancerous pressure for growth leads.

In other words, Capitalism cannot be used to defeat itself, and if Capitalism is itself the cause of our most deadly problems, as Kovel demonstrates persuasively, then it will have to be replaced not reformed.

Samuel Bowles and Herbert GintisDemocracy and Capitalism:
Property, Community, and the Contradictions of Modern Social Thought
Samuel Bowles and Herbert Gintis’ Democracy and Capitalism may be perhaps the most thorough analysis of the manner in which Capitalism opposes and even undermines Democracy, but it is a little dense for the non-academic reader. I will attempt to tease out the basic argument.

Bowles and Gintis conclude that “no capitalist society may be called democratic in the straightforward sense of securing personal liberty and rendering the exercise of power socially accountable.” A true commitment to Democracy, they argue, requires “establishing a democratic social order and eliminating the central institutions of the capitalist economy.”

The reason that Capitalism and Democracy are fatally opposed to each other is because Democracy entails the expansion of the rights of people, whereas Capitalism embodies the expansion of the rights of property, and these rights necessarily clash.

Liberal theory considered the state public, and the economy private. Therefore, the design of the liberal state balances obligations to respect both democratic rights and property rights. However, because the economy was considered a private sphere, corresponding democratic controls were not devised, and Capitalism was allowed free reign, instead of designing an economic democracy analogous to our political democracy.

Bowles and Gintis argue that this is a fundamental error in the design of our polity, because in fact economic decision-making has as much public impact as political decision-making, but Liberal theory cannot justify the lack of public input or democratic controls in the economy, given its justifications for both public input and democratic controls in the state.

Moreover, “Democracy [not only] promises the collective accountability of power,” but it also promises “the ability of people to effectively carry out their individual and common projects unencumbered by arbitrary restraint.” Capitalism, or, the failure to apply democratic principles to the economy, allows all kinds of domination to occur, including who gets privileged opportunities to win or lose within the economic sphere, as well as significant distortions of democracy in the political sphere. Or, as Bowles and Gintis put it,

“The rules of chess make it immaterial who plays with white and who with black; the rules of the game that make up society, however, generally confer systematic advantage on one group or another…The asymmetry of the games is the key to our understanding of domination.”

But despite their excellent analysis of the specific forms of domination that occur in an undemocratic economy, their final blow is aimed at the nature of the market itself, which Liberal theory mostly understands as a mechanism for the exchange of goods and services.

Bowles and Gintis point out, however, that “exchanges are far more than a simple transfer of ownership. They are complex social relationships”as illustrated by the kinds of exchanges that occur “between boss and worker, lender and borrower, or between buyers and sellers of different nations.” A market arena of self-interested and anonymous interaction might reduce not only the need for compassion, but also the sentiment itself. In this respect, the economy produces people as well as things, and the capitalist economy produces people that are not ideally equipped with the democratic sentiments and capacities.

In all these ways (and more, do read the book), Capitalism fatally undermines Democracy, including Democracy’s promise of the freedom to carry out our individual and common projects free from arbitrary restraint. To the extent that Democracy is just and good, Bowles and Gintis conclude, Capitalism is the opposite.

Michael MooreCapitalism: A Love Story
The movie’s website claims that all his films revolve around just two questions: Who are we, and why do we behave the way that we do?

In film after film, Moore’s answer to the first question is that we are just normal people — friends, neighbors, people who work hard, people modestly trying to make their way in the world. When Moore looks at America, he does not see celebrities, politicians, or athletes — he just sees people. And each of his movies introduces us to a new cast and their stories.

As for the second question, why do we behave the way that we do, Moore never finds a satisfying answer. Why do we shut down local economies? In Roger and Me, he couldn’t get an answer. In Bowling for Columbine, he wondered why do we immerse ourselves in guns, violently endangering ourselves and our children — especially when other societies seem to successfully limit the prevalence of both guns and violence?

Fahrenheit 911 explored the corruption of our political system, and Sicko of our medical system. Both films concluded that we had submitted ourselves to regimes that made no sense, at least compared with the alternatives.

Finally, in Capitalism: A Love Story, Moore addressed Capitalism itself, revealing it as the moving force behind corruption of judges, foreclosures, heartless evictions, underpaid-and-overworked airline pilots, and massive, institutionalized theft. Juxtaposed against this, Moore shows that the basic principles of Capitalism are not consistent with moral and religious codes, and he presented the possibility of worker-owned enterprises as an alternative.

Essentially, Moore asked whether, given the extraordinary weight of evidence that Capitalism is harmful, and the apparent availability of alternatives, why we should tolerate it? In an interview with Naomi Klein, Moore elaborated his argument:

“Capitalism is the legalization [of] greed. Greed has been with human beings forever. We have a number of things in our species that you would call the dark side, and greed is one of them. If you don’t put certain structures in place or restrictions on those parts of our being that come from that dark place, then it gets out of control. Capitalism does the opposite of that. It not only doesn’t really put any structure or restriction on it. It encourages it, it rewards it.”

Summary

So from Albert’s standpoint, the fundamental principles of Capitalism systematically degrade the conditions of social interaction, thus dividing us from one another, impoverishing us, and eventually sacrificing our collective well-being for the benefit of the few.

For Kovel, Capitalism will inevitably consume all of nature and the ecosystems that we depend on to survive. Thus, if we were to exercise what Thomas Hobbes would have characterized as our right and our duty to survive, then destroying Capitalism before it destroys us is an imperative.

Bowles and Gintis find in Democracy and the self-actualization of people the ultimate objective of our creating a society together, and Capitalism is undermines this fundamental social obligation.

For Moore, Capitalism destroys that which we love, and is opposed to our most basic moral principles.

All conclude, explicitly, that Capitalism is harmful, destructive, unjustified, and must be replaced. Moore calls it “evil,” and the others are similarly unequivocal in their denunciation.

Objections

The objections I cited originally are not as well-developed as the critiques I then attempted to summarize. Indeed, Michael Moore mentioned in his interview that those taken aback by his conclusion frequently ask, “What’s wrong with making money? Why can’t I open a shoe store?”

This objection seems to capture well the common concern — If Capitalism is Evil, then how can we engage in economic activity? What is allowed instead? Is it okay to do honest work and be able to buy things I want in return?

These very practical questions do not express any kind of disagreement with the logic of the arguments I have summarized, nor any disagreement with the underlying premises of the argument. Compare these additional objections noted at the beginning:

“Capitalism may be bad, but the alternatives are worse,” and “Capitalism has some negative effects, but the overall benefits of capitalism would be positive if we only protected against its harsh aspects,” and “Replacing capitalism would eliminate freedoms, so we might not be better off, and we could be much worse off.”

The focus is consistently on whether better alternatives exist, and do those alternatives have unknown risks, and what is the likelihood that we could successfully transition?

These are fair questions to which we must now turn. We are lucky to have a rich literature exploring the possibilities, and enough clarity that we could begin to chart our course should we summon the courage to change. These will be the subjects of future essays.

Conclusion

Let us close this topic then, with a clear commitment not to reforming Capitalism or rationalizing Capitalism, or making Capitalism better or kinder, but instead to replacing it, and eliminating it, because the facts and the logic, and the weight of the argument demonstrate, beyond a reasonable doubt, that Capitalism is Evil.